GBP crosses/Trade Ideas

GBP: Could surprise on the crosses; GBP/NZD for the mad contrarians

  • The market (myself included) had gotten very bearish on cable in particular and I have the feeling that GBP shorts are still running at high levels.
  • I’m no expert in fixed income markets, but surely Gilts are looking more attractive than many of the peripheral EZ markets?
  • The GBP has been bashed against exotics like the Kiwi and is trading close to record lows. All you mad contrarians out there should watch the developing inverted H&S on the daily chart.
  • Cable has decent technical resistance at 15580 which should be tough to overcome in the short term.

 

 

  1. I am watching kiwi with increased interest. It seems that both gbp/nzd and eur/nzd are forming a nice basing. Aud/nzd, nzd/usd and jpy/nzd are not conclusive yet, but exhibit early stages of possible reversals. I am not sure about beeng long pound agains anything, but given that 100 pips in nzd/usd would translate in 150+ pips in nzd/gbp at constant gbp/usd might make this mad contrarian trade be not that mad… I would wait for better signs of top in nzd/usd first. In general nzd/usd need some mad acceleration to keep picture bullish on dailies, so I would wait a day or two before doing crazy stuff.

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